Watchdog University Articles

DRUG PUSHER

AUGUST 2012

In his 1935 State of the Union message, President Franklin D. Roosevelt proposed social security, unemployment insurance, and aid to dependent children to help the deserving poor, but he added an ominous warning…

“The lessons of history, confirmed by evidence immediately before me, show conclusively that continued dependence on relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is a violation of the traditions of America.”

Whenever there is any substantive discussion regarding entitlement reform from Congress, like clockwork, leading Democrats head down to the Franklin D. Roosevelt memorial and pay homage in front of an ever eager press. Nancy Pelosi, Harry Reid or Chuck Schumer usually lead this pagan-like ritual. FDR could be considered a patron saint of the left, however if a politician were to reiterate his warning today, they would be considered cruel, heartless, and an enemy of our nation’s impoverished. The sad reality is that if welfare and our growing culture of dependence and entitlement is a narcotic, then Uncle Sam is the world’s biggest drug pusher.

The Cato Institute recently released a study entitled, Welfare and the Culture of Poverty. Their study shows that welfare is both a consequence and a cause of several conditions that they describe as social pathologies. These conditions include dependency, poverty, out-of-wedlock births, non-employment, abortion, and violent crime; all conditions that one would feel comfortable being associated with substance abuse. I contend that with all the money spent on welfare and entitlements and its horrible side effects, makes it theoretically our nations most destructive drug problem.

Welfare

We have spent trillions of dollars on welfare since 1964, when President Lyndon Johnson declared his war on poverty. The ranks of America’s poor are currently on track to return to levels that have not been seen since the 1960’s. Since president Obama has taken office, federal welfare spending has increased by 41 percent, which is more than $193 billion per year. For fiscal year 2011 welfare spending spread over 126 different programs totaled $668 billion. The current poverty rate is 15.1 percent, which is basically where it was in 1965. To put the spending in proper perspective, the first year after the war on poverty was declared the national poverty rate was 14.7 percent. Over the years the rate has fluctuated between 11 and 15 percent, only falling into the 11 percent range for a few years in the late 1970’s.

Welfare is not the only entitlement program where there is a disconnect between benefit and cost. Other Great Society programs such as our national health care programs, Medicare and Medicaid, are also busting our budget and is not encouraging coherent responsible health spending.

Medicare and Medicaid

Medicare, our program for the elderly was originally supposed to cost $12 billion by 1990, but instead cost $110 billion. Medicaid, our program for the poor has gone from $4 billion in 1966 to $242 billion in 2011. Both programs are laden with fraud that the government does little to combat. If they had to remake the famous 1980’s Miami Vice television series again today, Crockett and Tubbs would be pursuing Medicare con artists in their black Ferrari rather than cocaine dealers. Medicare fraud is bigger than the cocaine trade. The government’s involvement as a third-party payer has led to medical cost escalation rather than bending the cost curve down. There is never a check and balance with a government program. Efficiency is completely foreign to these programs.

Food Stamps

Food stamps were also the brainchild of President Johnson, and like his other programs have taken on a life of their own. The following are three recent stories regarding the program and showcases Uncle Sam’s pusher mentality and the ever present desire to drive Americans to dependency.

The government has been targeting Spanish speakers with radio “novellas” promoting food stamp usage as a part of a stated mission to increase participation in the Supplemental Nutrition assistance Program, or food stamps. Each novella comprising a 10-part series called “Parque Alegria,” or “Hope Park,” presents a semi-dramatic scenario involving characters convincing others to get on food stamps, or explaining how much healthier it is to be on food stamps. The majority of the episodes end with the announcer encouraging the listener to tune in again to see if the skeptic applies for benefits or learns to understand the importance of food stamps to their health. “Will Claudia convince Ramon to apply for SNAP?” the announcer exclaims at the end of a standard episode titled “The Poet,” “Don’t miss our next episode of Hope Park.”

USDA Suggests Food Stamp Parties, Games To Increase Participation

The United States Department of Agriculture (USDA) has embraced entire promotional campaigns designed to encourage eligible Americans to participate in the Supplemental Nutrition Assistance Program (SNAP), or food stamps. A pamphlet currently posted at the USDA website encourages local SNAP offices to throw parties as one way to get potentially eligible seniors to enroll in the program. “Throw a Great Party. Host social events where people mix and mingle,” the agency advises. “Make it fun by having activities, games, food and entertainment, and provide information about SNAP. Putting SNAP information in a game format like BINGO, crossword puzzles, or even a true/false quiz is fun and helps get your message across in a memorable way.”

USDA Partnering With Mexico To Boost Food Stamp Participation

The USDA has an agreement with Mexico to promote American food assistance programs, including food stamps, among Mexican Americans, Mexican nationals and migrant communities in America. “USDA and the government of Mexico have entered into a partnership to help educate eligible Mexican nationals living in the United States about available nutrition assistance. Mexico will help disseminate this information through its embassy and network of approximately fifty consular offices,” the USDA explains on their web page. Some of the materials that the USDA encourages the Mexican government to use to educate and promote the benefit programs are available free online for order and download. A partial list of materials include English and Spanish brochures titled “Five Easy Steps To Snap Benefits, How To Get Food Help, A Consumer’s Guide to FNCS Programs, Ending Hunger Improving Nutrition Combating Obesity and a poster with a slogan reading Food Stamps Make America Stronger.”

The sad reality is that we spend upwards of $80 billion each year paying for food stamps. The government has also been making the case that with food stamps, “everyone wins.” They are actually arguing that by accepting food stamps one is helping to grow the economy.

From the official SNAP brochure distributed by the U.S. Department of Agriculture…

“Each $5 dollars in new SNAP benefits generates almost twice that amount in economic activity for the community. Everyone wins when eligible people take advantage of benefits to which they are entitled. Even a small increase in SNAP participation can have a substantial impact. If the national participation rate rose 5 percentage points, 1.9 million more low-income people would have an additional $1.3 billion in benefits per year to use to purchase healthy food and $2.5 billion total in new economic activity would be generated nationwide.”

If you follow the government’s logic all we need to do to get the country booming again is to get everyone on food stamps. Do they think we are really that stupid?

Also, how and where food stamp money is spent is a more closely guarded secret than what takes place or is housed at Area 51. Food stamps can be spent on everything from Twinkies to lobster and steak (a listener actually sent me a receipt he picked up at his grocery store in Michigan where the person in front of him in line bought fillet mignon and lobster with his SNAP card.) As the amount of money spent on food stamps has more than doubled over the past few years, the amount of money laundered in cash has gone through the roof. Despite all the fraud, the USDA will not release the data that discloses where the money is being spent and what it is being spent on.

Social Security Disability

The number of workers taking federal disability insurance payments is now at 8,753,935. A little perspective on that number: It is greater than the population of 39 states; it is greater than the population of New York City. Congress added disability insurance to the Social Security system in 1956 and since then the ratio of workers to disabled has dramatically declined. In 1967 the ratio was 65 to 1, by 1987 it was 41 to 1, it is now 16 to 1. The Social Security Trust Fund has run deficits in each of the last three years. The government borrowed $8.5 billion in 2009, $20.8 billion in 2010 and $25.3 billion in 2011 to make payments.

We are at point where more people are enrolling in the Social Security Disability program than actual jobs being created. How is it with all of our workspace requirements and safety regulations are so many people getting injured on the job?

Two studies released last year show a pretty curious coincidence between when individuals go out and apply for disability benefits and when their unemployment payments are exhausted. The coincidence has become so obvious that in my opinion the program has become an extended unemployment program.

“The studies conclude that whereas the disability program was established to offer financial assistance for people no longer capable of working due to injury or poor health, theses days an expanding group of applicants with manageable health impairments or no impairments at all have added to the already financially taxed system.”

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The Republican side of the Senate Budget Committee just released a terribly sobering statistic, “Over 100 Million People in U.S. Now Receiving Some Form Of Federal Welfare.” The federal government administers nearly 80 different overlapping federal means-tested welfare programs. These numbers do not include individuals who are only benefitting from Social Security and/or Medicare.

President Franklin Roosevelt was right. We are a nation addicted to welfare. We are a welfare state. America is already Europe.

Arthur Brooks of the American Enterprise Institute made the point in the Wall Street Journal…

“I’m often asked if I think America is trending toward becoming a European-style social democracy. My answer is: No, because we already are a European-style social democracy.” From the progressivity of our tax code, to the percentage of GDP devoted to government, to the extent of the regulatory burden on business, most of Europe’s got nothing on us. In 1938 the year the AEI was founded, total government spending at all levels was about 15% of GDP. By 2010 it was 36%. The political right can crow all it wants about how America is a conservative country, unlike Spain, a country governed by the Spanish Socialist workers Party for most of the past 30 years. But at 36%, U.S. government spending relative to GDP is very close to Spain’s. And our debt-to-GDP ratio is 103%; Spain is 68%.”

The sad reality is that we can expect to see slow growth and high unemployment for the foreseeable future, unless we can kick our welfare addiction. Europe is having austerity forced upon them because they can no longer fund their drug habit. Their people are reacting in a manner eerily reminiscent to addicts in withdrawal. As painful as it may be, we need to get off our destructive narcotic before it is too late. Cradle to grave welfare states only last as long as somebody else is willing to foot the bill.